PVH Corp., the owners of Van Heusen, Izod, G.H. Bass and Calvin Klein, has reached a $716,400 class-action settlement to resolve allegations that the company conducted background checks of employment candidates in violation of federal law. In an April 2015 filing, plaintiff Luis A. Rodriguez alleged that PVH and Calvin Klein denied him employment as a store manager based on the results of a background check. The company failed to share the results with Rodriguez before adverse action was taken, as is required by federal law.

In this particular case, the incriminating report about Rodriguez was inaccurate, but the applicant had no opportunity to dispute it before being denied the job. For employers, this suit serves as a reminder that failure to share negative information with applicants—even if the adverse information would automatically bar them from employment—is illegal and actionable.